India will be importing its first ever consignment of U.S. liquefied natural gas (LNG), a mere nine months on from signing up for its first consignment of American crude oil.
In a statement on Monday (5 March), coinciding with the first day of IHS CERA Week in Houston, U.S., – an event that’s considered one of the oil and gas sector’s signature jamborees – Cheniere Energy, a leading American LNG exporter, said it would be sending its first consignment to India via the Sabine Pass Terminal in Louisiana.
The importer – Gas Authority of India Limited – one of New Delhi’s state-owned energy companies, said the takings would be under a 20-year sale and purchase agreement (SPA).
In what ought to make OPEC take notice, Tripathi added: “This long term agreement would go a long way in strengthening the relationship between GAIL and Cheniere and reinforcing India-U.S. trade ties.”
Many at CERA Week are heralding the development as a game changer, with India already well on its way towards importing U.S. crude, having inked an agreement for its first million barrels as recently as July 2017.
U.S. Energy Association Executive Director Barry Worthington said: “The move is significant because it means security for India, the world’s third largest energy consumer. Other countries are trying to secure their own resources in the face of rising energy demand marked by a projected 30% increase in global energy consumption by 2040.”
Worthington reckons it’s a win-win situation for both parties. The U.S. is the world’s largest natural gas producer, a leading supplier of LNG, and is expected to become the largest producer of crude oil this year. Concurrently, India is trying to increase its use of natural gas.
“The fuel comprises about 6% of India’s energy mix, while its government is taking steps to move the needle closer to 15% within five years. As India tries to secure energy supplies and reduce emissions by using more natural gas, the U.S. is a logical energy partner.”
So the message from Houston and New Delhi is expect more of the same.